The idea that individuals can reach an efficient equilibrium through private trades, even in the presence of an externality, is called:
A)market failure.
B)trade quotas.
C)the Coase theorem.
D)the invisible hand.

Question

Quizplus · Accepted Answer

The Coase theorem posits that if property rights are well-defined and transaction costs are negligible, parties can negotiate to correct for externalities and reach an efficient outcome on their own, without government intervention.

The Idea That Individuals Can Reach an Efficient Equilibrium Through